Former Tesco chief executive Sir Terry Leahy has defended his legacy at the retail giant, which has spent much of the decade nursing itself back to health.
It has been suggested that Leahy, who stepped down in 2011, chose to leave just before the supermarket group began to struggle in a hospital pass to successor Philip Clarke.
Leahy told the Standard: “That wasn’t the consensus view of all of the City analysts at the time. Their forecasts were for a 50% growth in profits for next 2-3 years following that. The business was in great shape but no business can take its success for granted, particularly in retailing. You have to secure success day by day, week by week.” He added he was “proud” of his record in steering Tesco through the financial crisis.”
The Liverpudlian spent 14 years at the helm of Britain’s biggest retailer. He said: “Profits [were] up five times, sales up five times, share price up five times in a slow growth industry that’s something to be proud of.”
He built a vast international empire as debts ballooned from around £1 billion to £6.8 billion during his tenure. Much of that expansion has now been unpicked through sell-offs and closures, including his US venture Fresh & Easy which was shut in 2015.
He said of that business’ struggles: “The timing didn’t help because it opened up in the areas that were hit by the sub-prime loan crisis largely in the western United States but I think if the business had been given longer you would’ve seen a recovery from those kind of economic problems.”
Clarke was ousted in 2014 with sales struggling, and successor Dave Lewis revived the grocer after an accounting scandal.
Leahy faced stinging criticism from his predecessor Lord Maclaurin who dubbed the decision to launch in America “arrogant” and that the “rot was in Tesco” before Clarke took charge. Leahy declined to comment on the remarks.
Leahy, who has rarely spoken out since leaving Tesco, was speaking after the launch of nicotine replacement product Voke. The invention, in which he is an investor alongside former Co-op chief executive Martin Beaumont and ex-Sainsbury’s chief Sir Peter Davis, is a cigarette-like device with a medical license.
The product uses technology similar to an inhaler to put nicotine into the bloodstream quickly, satisfying the craving satisfaction of a cigarette but with a lower dose of nicotine than many e-cigarettes. Leahy said: “It’s a worthwhile product, 80,000 people a year die in the UK alone but it’s a new technology, it’s a medicine so getting it through that regulatory process has been fascinating.”
Leahy now divides his time between private equity firm Clayton, Dublier & Rice, where he is an advisor, and venture capital investing. At CDR he aided the float of budget retailer B&M, where he was chairman, and is now advising petrol station retailer Motor Fuel Group, French furniture retailer BUT, autoglass firm Belron and caterer WSH.
He has “20-30” personal investments, largely in high-growth ecommerce firms.
